There’s some drama enjoying out across the cap desk of Reservoir Media – the Nasdaq-listed music rights firm.
Irenic Capital, which owns round 8% of Reservoir, has issued a press release right this moment (September 30) outlining its intentions as an activist shareholder of the corporate.
That assertion reads: “On September 30, 2024, Irenic Capital Administration LP believed that the securities of [Reservoir] are considerably undervalued and inspired the Firm to undertake a full strategic evaluate of all options to maximise shareholder worth and to kind a particular committee of the Board to supervise such evaluate course of.
“As well as, Irenic Capital said that it might take into account, discover and/or develop plans and/or make proposals with respect to, amongst different issues, the issues set forth.”
To summarise: Irenic is demanding a strategic evaluate of Reservoir, and threatening that it’ll situation its personal proposals to shareholders if such a evaluate shouldn’t be undertaken.
In response to Irenic Capital’s assertion, a Reservoir spokesperson informed MBW: “The Reservoir Media Board of Administrators values shareholder enter and we stay centered on executing our technique to drive worth, in step with our fiduciary responsibility to all shareholders.”
(MBW’s learn on that assertion: the reference to deal with “executing our technique” – versus anybody else’s technique – could recommend that Reservoir’s administration is so far comparatively unruffled by Irenic’s calls for.)
On the time this story was revealed, Reservoir Media’s share worth at present sits at USD $7.79 on the Nasdaq, representing a market cap of roughly $504 million.
That share worth is up roughly 10% year-to-date, and up 30.5% YoY (see beneath), based on Google Finance.
Understanding Reservoir’s possession construction helps one perceive the problem Irenic Capital has introduced to its board.
In line with the newest related SEC filings, Irenic Capital owns 5.299 million shares in Reservoir, representing 8.1% of the corporate.
That possession stake is dwarfed by that of Wesbild Inc, which owns greater than 28.5 million shares in Reservoir, representing roughly 44% of the corporate’s fairness.
Wesbild Inc, run by Chairman, Hassan Khosrowshahi, is a subsidiary of Persis Holdings Ltd, which represents the funding pursuits of the Khosrowshahi household.
Golnar Khosrowshahi is the founder and CEO of Reservoir. Since establishing Reservoir in 2007, she has steered the corporate to symbolize over 150,000 copyrights and 36,000 grasp recordings.
The corporate generated USD $144.9 million in annual revenues within the 12 months to finish of March 2024, its fiscal 12 months. That determine was up 14% YoY organically, or 18% YoY together with acquisitions.
Different institutional shareholders in Reservoir embody Richmond Hill Investments Inc – by way of ER Reservoir LLC – which owns 13.64 million shares, based on SEC filings. That equates to roughly 21% of Reservoir’s fairness.
Elsewhere, corporations corresponding to BlackRock personal single-digit institutional stakes in Reservoir.
Manhattan-headquartered Irenic Capital was based by Adam Katz and Andy Dodge.
Katz is a former Affiliate Portfolio Supervisor at Elliott Administration; Dodge beforehand served as an Funding Accomplice at Indaba Capital Administration.
In line with Irenic’s web site: “Irenic invests in public corporations and works collaboratively with agency management. Our objective is to supply enhancements in working and monetary efficiency that create long-term worth for the corporate and its homeowners.”Music Enterprise Worldwide
